SPY QQQ IWM 5-5-13
The markets were up a reasonable amount this week and broke-out to higher prices on Friday: S&P 500 (SPY) +1.98%, Nasdaq 100 (QQQ) +3.67%, Russell 2000 (IWM) +2.00%. Let’s take a look at what sectors led in order to see if the move higher looks healthy or not. Generally, we want to see a rotation into higher risk sectors on moves higher.
Sectors 5-5-13
This week, technology (XLK and QQQ) and energy (XLE) led the markets higher indicating a rotation to riskier sectors. On the picture above, the highlights are the top 3 performing sectors for each time period. For the quarter, healthcare (XLV), consumer staples (XLP), and utilities (XLU) have led but were the laggers this week, another indication of increased risk appetite.
MELI ADBE SBUX DIS WYNN GOOG V
This last week has produced the most setups that I have seen in recent weeks. Now, you can take this as a contrarian and say, “it’s too bullish,” or you can take it as healthy. Personally, I’ll take it as health. Also, I am not dismissing the fact that we could correct this coming week but it will simply create better entries. All of the above tickers look great for higher prices, I just need to cherry pick the best ones this coming week!
Earnings 5-5-13
Lastly, I focus on selling put credit spreads or buying call vertical spreads on these tickers so being aware of which options contract months are being affected by earnings is key. Luckily, as seen on the table to the left, most of these names have already reported or will report this week. Another thing that has been working during these bullish times is selling weekly put credit spreads, returning about 5% weekly on margin.
Options Trading
Markets Keep Exploding And Options Watchlist
SPY QQQ IWM 5-5-13
The markets were up a reasonable amount this week and broke-out to higher prices on Friday: S&P 500 (SPY) +1.98%, Nasdaq 100 (QQQ) +3.67%, Russell 2000 (IWM) +2.00%. Let’s take a look at what sectors led in order to see if the move higher looks healthy or not. Generally, we want to see a rotation into higher risk sectors on moves higher.
Sectors 5-5-13
This week, technology (XLK and QQQ) and energy (XLE) led the markets higher indicating a rotation to riskier sectors. On the picture above, the highlights are the top 3 performing sectors for each time period. For the quarter, healthcare (XLV), consumer staples (XLP), and utilities (XLU) have led but were the laggers this week, another indication of increased risk appetite.
MELI ADBE SBUX DIS WYNN GOOG V
This last week has produced the most setups that I have seen in recent weeks. Now, you can take this as a contrarian and say, “it’s too bullish,” or you can take it as healthy. Personally, I’ll take it as health. Also, I am not dismissing the fact that we could correct this coming week but it will simply create better entries. All of the above tickers look great for higher prices, I just need to cherry pick the best ones this coming week!
Earnings 5-5-13
Lastly, I focus on selling put credit spreads or buying call vertical spreads on these tickers so being aware of which options contract months are being affected by earnings is key. Luckily, as seen on the table to the left, most of these names have already reported or will report this week. Another thing that has been working during these bullish times is selling weekly put credit spreads, returning about 5% weekly on margin.
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